5 Things to Consider Before Quitting Your Day Job

Many of us have the dream of starting a business, or working self-employed from home. I love working from home, even though sometimes I feel like I am anything but my own boss. In my case, leaving my “day job” was easy — I didn’t have one. Instead of leaving a traditional job to work from home, I had just completed a graduate degree. My husband still had more schooling, so we decided that we would use his student loans to supplement for a year or two while I worked to build a freelancing business.

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The result was that we never had to worry about the income drop that comes when you quit your day job to start a business from home. Others, though, don’t have that luxury. Before you quit your day job, you need to carefully consider your financial situation, and ask a few questions.

Are You Ready to Quit Your Day Job?

Here are five things to consider before quitting your day job to work from home:

1. Can you reasonably support yourself while you start your business?

A successful home business doesn’t happen overnight. Before you quit your day job, you need to have a financial support system in place.

If you can support yourself while you work to get the business off the ground, it might be a good time to quit your day job.

2. Is it possible to start your business without quitting?

Perhaps you can start your side business without quitting your job. If you can spend two or three hours in the evening working on your business (instead of watching TV), perhaps you can get some revenue coming in. Then, you can address the issue of quitting later, when your home business is more established.

3. What is your benefits situation?

If your life partner has the benefits, then your quitting won’t make a big difference. However, if your day job has been providing the benefits, you need to come up with a viable plan. Health insurance is costly, and you need to be ready to deal with that reality. Before you quit, come up with a plan for providing benefits for your family.

4. Is your home equipped for a home office?

Make sure you have a workspace available to you. It doesn’t have to be a big space, but it should have what you need. Make sure you have the Internet connection you need, as well as the office supplies that will make your home office work. You want to set up for success before you quit your day job. A properly designed space can improve your productivity.

5. Can you — and your family — handle the emotional issues?

Realize that new stresses will come with working from home. Your kids will have to be able to understand that just because you’re home doesn’t mean you can play all the time. Your life partner will have to be willing to sacrifice some of the time spent with you. Additionally, you need to make sure that you are emotionally ready to deal with the isolation that can come with working from home, as well as ensure that you are sufficiently self-motivated.

If you feel you are emotionally ready, and if your finances can handle it, quitting your day job can be a good choice.

Photo from Wikimedia Commons.

About the Author

By , on May 22, 2013
Miranda
Miranda is a freelance writer and professional blogger, specializing in financial topics. She has written for a number of financial web sites, and her work has been linked to by many publications, online and off. Miranda's blog is Planting Money Seeds.

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{9 Comments}

  1. Great post – I’m planning to go full-time in January 2014 so this was timely!

  2. Harry says:

    I agree with you on #2. If you do not have sufficient savings that can keep you going for few months without any cash inflow it is advisable to keep your day job. It will be very challenging to handle two full-time jobs at the same time, but at least it will give you some cushion if things don’t work out as planned.

    I had written an article on how you can succeed in starting a business while working full-time. Would love to hear your expert view on it – http://www.smallbizviewpoints.com/2010/10/07/how-to-succeed-in-starting-a-business-while-holding-full-time-job/

  3. Hi Miranda,
    Points 1 and 2 are closely related. Sometimes, even if you can afford to quit your job, you shouldn’t, because sometimes getting your business to the point where it is generating revenue in your spare time will let you know when to quit. But the second point is important too. There are times when starting certain businesses while working full time is just not feasible. Thanks for sharing with the BizSugar community.

  4. #5 is a great point and so often overlooked. More time spent with family is, in my experience, not always a cut and dry optimal situation. Adjustments have to be made.

  5. Health insurance has been the biggest concern for me. When bf and I get married and I can go on his health insurance that will probably be the last step towards quitting my job for me. Not having health insurance (although I’m healthy) is just too scary. One health crises and all of your emergency fund can be wiped out.

  6. Terry says:

    I agree with you, and Fat Free Personal Finance, that keeping your regular as long as possible, and developing your dream job in your spare time is the best approach.

  7. I appreciate #2. Most people think that, in order to start their own business, they have to stop EVERYTHING they’re doing so that they can fully focus on one thing. While I completely understand giving something 100%, it’s very possible to give several things 100% at the same time. There are many hours of the day. Rather than sacrificing money and security, I would rather sacrifice a little sleep.

    Do you think that it’s easier to make the plunge into self-employment while you’re single or when you have a family. On one hand, there’s fewer people to support, but on the other hand, there’s less of a safety net if you fail (assuming your spouse earns an income).

  8. Mary Slagel says:

    This is a great post. Most people decide to quit their day job and work from home only with the idea that they can be their own boss and set their own hours. Very few actually understand the reality of it. This is a great checklist to remind them.

  9. Michelle says:

    This is a great list. I am working on my side hustles and making sure that they are stable before I quit my job.

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